KOLKATA: Lead acid storage battery manufacturer Exide Industries reported a lower net profit of Rs 163.20 crore for the first quarter (Q1) ended June 30, 2011, compared to Rs 165.34 crore net in the corresponding period previous fiscal. Net turnover during the April-June period, however, grew by 8 % to Rs 1244 crore.

Company officials attribute the Q1 performance to slower growth in the automotive vehicle segment and the lower demand for inverter batteries.

Elaborating further, Exide Industries managing director & CEO T.V. Ramanathan said: "The demand growth seen in the country's automotive industry over the last several quarters did not continue, resulting in lower OE demand. The prevalent power supply situation and pleasant weather conditions in the north Indian markets also resulted in lower inverter battery sales during the quarter."

"Whilst demand in key high volume segments were subdued, lead prices remained high resulting in a drop of 300 basis points in the operating margins at profit before interest, depreciation and tax (PBIDT) level. Demand contraction reduced the company's ability to pass on, in full, the cost of lead. These factors dampened sales and profitability," he added. Ramanathan, however, feels these setbacks are short term.

Meanwhile, the company continued with its planned investments aimed at augmenting capacities in all its plants across the country to benefit when the economy regains the robust growth. Capacity enhancement in the new Ahmednagar plant is on schedule and capital expenditure of Rs 370 crore budgeted for this financial year. Various brand building and related marketing initiatives have been undertaken since June 2011 and the favourable impact of these initiatives is expected to get reflected by Q3 of this year.